A Medicare Cost Plan is a type of health insurance plan in the United States that operates under a contract with the Center for Medicare & Medicaid Services (CMS). It bridges the benefits of Original Medicare with some features of Medicare Advantage Plans, provided in specific areas where Medicare Advantage Plans may be less available.
Key Features
Contract with CMS: These plans operate under a contract approved by the CMS, ensuring they meet federal standards for health coverage.
Reimbursement Model: Medicare Cost Plans reimburse providers on a capitated basis, meaning they receive a pre-determined monthly payment per enrollee. This payment is based on a total estimated annual budget for contingent member care needs.
Flexibility in Provider Choice: Beneficiaries can choose to receive services from healthcare providers either within or outside the plan’s network. This feature stands out compared to Medicare Advantage Plans where out-of-network care may lead to higher out-of-pocket costs.
Exclusion of Part D: These plans generally do not include standalone Medicare Part D prescription drug plans. Beneficiaries looking for drug coverage may need to enroll in a separate Medicare Part D Plan.
Regulations and Guidelines
Medicare Cost Plans are regulated under various CMS guidelines which ensure compliance with necessary service levels and financial solvency. Furthermore, these plans adhere to provisions as stated under the U.S. Public Health Services Act. Beneficiaries are encouraged to review rules and eligibility criteria detailed in the Medicare & You Handbook published yearly.
Availability
These plans are only available in certain geographical regions, primarily where Medicare Advantage plans are less prevalent. Enrollment options and availability can also change annually based on contractual agreements with CMS.
Considerations
Before opting for a Medicare Cost Plan, beneficiaries should evaluate their healthcare needs, budget, and whether the plan’s benefits align with their expectations. Additionally, it is beneficial to understand how these plans vary from Original Medicare and Medicare Advantage Plans to make an informed decision.
